Treasury now estimates nearly 1.8 million job losses

National Treasury now estimates that job losses could be between 690 000 and 1.79 million due to the impact of Covid-19 on the SA economy.

Initially, in a presentation circulated among members of the Standing Committee on Finance on 30 April, Treasury indicated that between three million and seven million job losses were expected, which would have seen unemployment levels balloon to nearly 50%.

In its revision, the presentation now indicates that 690 000 job losses are likely in the event of a quick recovery. While 1.79 million jobs could be lost in a worst-case scenario. A full time equivalent measure was used this time, to take into account businesses that may be making use of furloughs, among other measures, to mitigate the impact on jobs, Treasury said.

During the last global recession in 2008-09, SA lost one million jobs.

Job loss estimates from Treasury indicate anything

The revised job losses could be nearly 1.8 million, according to projections from Treasury. (Source: National Treasury).

Sectors that will be mostly affected are manufacturing, construction, trade, catering and accommodation and financial and business services. 

Treasury also projects an economic contraction of between 5.4% and 16.1%. Updated projections are expected to be presented at the tabling of the adjusted budget later this month.

The Reserve Bank projects a contraction of 7%, which would be the worst performance since the Great Depression in the 1930s.

At a briefing to members of the South African National Editor's Forum on Sunday, President Cyril Ramaphosa said that Covid-19 has presented an opportunity to restructure the economy to one which is more inclusive and addresses issues in society such as poverty and inequality, Fin24 reported.

"We have been operating under an economy which has been colonial and racist, over the many years," he said. "Covid-19 gives a stronger rationale to transform and restructure the economy," he added.

ZAR/USD
17.63
(-0.04)
ZAR/GBP
23.01
(-0.05)
ZAR/EUR
20.79
(-0.01)
ZAR/AUD
12.62
(-0.03)
ZAR/JPY
0.17
(-0.01)
Gold
2034.21
(+0.05)
Silver
28.28
(+0.09)
Platinum
961.50
(+0.38)
Brent Crude
44.55
(-1.53)
Palladium
2166.01
(+0.63)
All Share
56757.73
(-1.56)
Top 40
52435.65
(-1.72)
Financial 15
9897.96
(+0.10)
Industrial 25
74671.49
(-1.98)
Resource 10
58948.78
(-1.89)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 932 votes
It depends on how the funds are used.
74% - 6250 votes
No. We should have gotten the loan elsewhere.
15% - 1285 votes
Vote